The Lean Equation

Can Lean be represented by a single equation?  In simple terms Lean can be defined as the most efficient use of resources in the creation of value for the end customer.  Business is about the system or series of processes to satisfy the customer.  Processes by definition can be defined.  So if Lean is a business system for thinking customer value it can be represented below: 

Demand is the amount of work in the system.  Capacity is the resources available to do the work.  Demand minus Capacity results in a Load on the system.  If the demand is greater than the capacity the system is overloaded.  If the demand is less than the capacity the system is considered underloaded.

John Seddon, author of Freedom from Command and Control, indentified that demand is made up of two types: Value Demand and Failure Demand.  Understanding the nature of demand is starting point for Lean.  Value demand or true demand is the value determined by the customer.  Failure demand results from a failure to do it right the first time or from a failure to take action.  Value demand in turn comes from predictable demand and variable demand.  Shifting or leveling these demands can free up capacity.

Taiichi Ohno, considered the father of the Toyota Production System, said that capacity is work plus waste.  So if we identify and eliminate waste then "free" capacity is released into the system.  Removing waste also allows for further reduction in failure demand.

Some underload is desirable because of variation in demand.  A process that is loaded to 100% (where demand equals capacity) will frequently fail to meet the customer's requirements.  When the system is underloaded then any spare resources should be directed to waste removal.

Reducing variation in demand by persuading customers to take smaller, more frequent batches can reduce the load on the system.  This can result in improved customer service levels and the ability to handle more demand.

This Lean equation illustrates that reducing failure demand, reducing wastes, leveling the demand, reducing variation, and using slack capacity to focus on improving efficiency are all necessary for satisfying the customer's requirments.  Furthermore, these activities result in feedback loops within your business system for continued input for PDCA (plan-do-check-act).

Lean Quote Inspirational Leadership

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

Feel free to share some of your favorites here as well.

"If your actions inspire others to dream more, learn more, do more and become more, you are a leader." — John Quincy Adams quotes (American 6th US President (1825-29), eldest son of John Adams, 2nd US president. 1767-1848)

What makes a leader inspirational? The ability to inspire people to reach great heights of performance and success is a skill that leaders need. Passion, purpose, listening and meaning help make a leader inspirational.

People do what they have to do for a manager, they do their best for an inspirational leader.  Leaders must create a corporate culture that inspires, empowers, and energizes employees.

To inspire, you must both create resonance and move people with a compelling vision.  You must embody what you ask of others, and be able to articulate a shared vision in a way that inspires others to act.  You must offer a sense of common purpose beyond the day-to-day tasks, making work exciting with fun.

Inspirational leaders have an important role to play in their organization as defined below: 

10 Roles of Inspirational Leaders

1.  Provide an inspiring vision and strategic alignment, launch a crusade

2.  Help people connect their personal goals to business goals
3.  Make relentless innovation a religion
4.  Encourage entrepreneurial creativity and experimentation
5.  Involve everyone, empower and trust employees
6.  Coach and train your people to greatness
7.  Build teams and promote teamwork, leverage diversity
8.  Motivate, inspire and energize people, recognize achievements
9.  Encourage risk taking
10. Make work fun

The ability to inspire and motivate workers to high performance is one behavior that separates top-performing leaders from the rest of the pack.

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More Lean Tips

For my Facebook fans you have probably already seen this. But for those of you that are not connected to A Lean Journey on Facebook or Twitter I started a new feature which I call Lean Tips.  It is meant to be advice, things I learned from experience, and some knowledge tidbits about Lean to help you along your journey.

Click this link for A Lean Journey's Facebook Page Notes Feed.

Here is the next edition of tips from the Facebook page:

Lean Tip #16 - Use visual controls so no problems are hidden

Install simple visual indicators that tell people when the standards are being followed. Avoid using computer screens that take workers out of the work area. Reduce all reports to a single sheet of paper even for your more difficult financial decisions.

Lean Tip #17 - Use only reliable thoroughly tested technology that serves your people and processes

It is best to workout a process and to add the necessary disciplines before adding technology. New technologies can be unreliable and general are not well understood and are difficult to standardize. A standardized process that is well implemented is better than a misunderstood new technology.

Lean Tip #18 - Develop exceptional people and teams who follow your company's philosophy

Empowerment happens when employees use the company tools to solve problems. Build cross functional teams to improve quality and productivity. Work hard to reinforce the company culture and assure it is followed over the course of years.

Lean Tip #19 - Make decisions slowly by consensus, thoroughly considering all options; implement

Thoroughly explore alternatives before choosing one path to follow. Take time to build consensus by understanding all views on an issue. It is only when all alternatives have been considered that a decision is made, then implementation should be pursued swiftly.

Lean Tip #20 - Don't Give People Rules They're Unable to Follow

This tip applies in many ways, but let's look at it in context to the rule of never knowingly pass defects to the following processes. What do they do if they find a defect? Who do they call? Where do they put the part? If these issues are not defined people will be confused and conflicted. People want to do the right thing and follow instructions, but if it isn't possible to follow the rule and get the job done effectively, they will choose to get the job done and violate the rule. Don't assume that people break the rules because they don't care. Maybe there is not a good system for helping people to follow the rules.

Lean Tip #21 - A New Standard Requires a Learning Period

It is not uncommon to see a slight drop in performance as people adjust to the new method. Do not rush to go back to the old way. Continue observing to ensure that the method is being followed as planned and that any minor adjustments are made immediately.

Lean Tip #22 - Schedule Regular Reviews of Progress on the Floor

Unfortunately, some top leaders get into a pattern of e-mail, meetings, and travel, and walking the floor to see firsthand lean progress is at the bottom of their priority list. There should be a regularly scheduled walk-through of the facility. There should be visual indicators of progress in the lean projects, and general metrics so it's clear when walking into the area how they are doing. Also, a checklist for the walk-through, noting what to look for is a good addition.

Lean Tip #23 - Ask the Five Whys to get beyond the obvious symptoms to discover the root cause

Taiichi Ohno gave this example about a machine that stopped working (Ohno 1988, p. 17):

1. Why did the machine stop?

There was an overload and the fuse blew.

2. Why was there an overload?

The bearing was not sufficiently lubricated.

3. Why was it not lubricated?

The lubrication pump vs not pumping sufficiently.

4. Why was it not pumping sufficiently?

The shaft of the pump was worn and rattling.

5. Why was the shaft worn out?

There was no strainer attached and metal scarps got in.

Without repeatedly asking why , we would likely replace the fuse or pump and the failure would recur. Keep asking why until the root cause is reached and eliminated.

Lean Tip #24 - Optimize the 4 M's that produce value for the customer.

In a lean system, the 4 M's are:

Material - no defects or shortages.

Machine - no breakdowns, defects, or unplanned stoppages.

Man - good work habits, necessary skills, punctuality, and no unscheduled absenteeism.

Method - standardized processes, maintenance, and management.

Lean Tip #25 - Use Red Tags to label unneeded items for removal in manufacturing or service functions.

Red tagging is a necessary step in 5S under the first S, sort. It Is a simple method for identifying potentially unneeded items in the factory, evaluating their usefulness, and dealing with them appropriately.

For an item with a red tag, ask 3 questions:

Is the item needed?

Is the item needed in this quantity?

Is the item needed at this location?

Lean Tip #26 - Store items based on the frequency of use.

Use this helpful guideline for determining where in your area items should be stored based on their use.

Frequency of Use                              Location

Never                                                   Place in holding area

Seldom(once/year)                              Store in a remote location

Infrequently (less than once/month)   Store at facility

Once/week                                          Store in work area

Once/day or more                               Store at workplace

Lean Tip #27 - Create conditions that promote discipline in activities.

Make adherence to the rules easier to follow with these guidelines:

AWARENESS and understanding of Lean

You need to have or make enough TIME for Lean

STRUCTURE to support how & when Lean is done

SUPPORT from management

Rewards and Recognition

Satisfaction, Fun, and Excitement

Lean Tip #28: When listening learn to understand nonverbal communication

There are two ways to communicate nonverbally: (1) body movements such as facial expressions, gestures, and posture, and (2) spatial relationships, such as how much distance you put between yourself and the other person.

Understanding body language is essential because over 50 percent of a message's impact comes from body movements.  The total impact of a message can be broken down like this:

       7 percent          verbal (words)

       38 percent        vocal (volume, pitch, rhythm, etc.)

       55 percent        body movements (mostly facial expressions)

Lean Tip #29 - Use a project log to record your mistake-proofing ideas to improve and enhance the quality of your solutions

Include in the log the following fields:

Mistake being madE

Benefits of mistake-proofing this mistake

Process where the mistake resides

Root cause of this mistake

Explanation of the mistake-proofing solution

Type of (solution) effect

Type of (solution) outcome

The log can be used as a coaching feature that will help you improve and enhance the quality of your mistake-proofing solutions.

Lean Tip #30 - Wherever possible, use mistake-proofing techniques that lead to a forced control effect.

With forced control, the action or trigger that leads to the effect is both automatically triggered and compulsory.

There are four families of devices or methods used to achieve a forced control effect:

Elimination

Combination

Use of Guides

Process Control Systems

5S Supply

I am often asked about lean resources that can help you along your lean journey.  I list a number these on the right hand side of this site and from time to time highlight those here.  Today I want to share with you 5S Supply.

5S Supply started out as a way to gather the necessary supplies for a successful 5S event and program in a timely fashion, with no hassle.  Now they have created one convenient location for you to find all the items that will prove useful in performing successful kaizen events.  They do much more than just 5S as their tag line states "Lean Simplified.  Everything you need…all in one place."

I met one of the founders, Tony Manos, about a year ago after starting a dialogue following a webinar on 5S in the office.  Tony is the author of the 5S Supply Blog and has also been a guest author here on removing resistance to change.

5S Supply recently marked their 4^th Anniversary by offering several hundred more products.  Their wide product offering includes products from a number of well know organizations like LEI, ENNA, and GBMP.

Below are some product offerings to note:

• Under free stuff they offer the 5S Numbers Game (which I talked about here)
• Also there is an upcoming free webinar on Hoshin Kanri on September 22.
• They have an exclusive 5S Red Tag Holder that can accommodate a Single Point Lesson or a magnetic white board
• There are several promotional items that can be used to reward and recognize employees in your organization.
• A large selection of books, dvds, and training kits and exercises make it easier to continue being a learning organization.

The site has a number of videos integrated into the product offerings which highlight various products as well as interviews with lean practitioners on a number of topics.

I encourage you to check out all the 5S Supply has to offer I am sure you will be pleased.

Disclosure:  5S Supply is a proud sponsor of A Lean Journey Blog.

Personal Kanban Kaizen

A couple of months ago I talked about a kanban for personal management. This concept had two desirable elements:

1) Visualizing your work
2) Limiting your work.

In my previous visual task board I found prioritization meaningless. Tasks are either important or not. If it is important then put it on the list. If not then don't waste time or space pretending that you'll get to it, because you won't.

Dan Markovitz from TimeBack Management and I had several discussions on the set-up of a personal kanban. We discussed how to determine the size of WIP. The WIP limit shouldn't be determined by the number of items, because one large task/project consumes as much time (which is your critical resource) as eight small tasks. Unlike a production line where the cycle time is both known and constant, knowledge work is inherently more variable. So it's tough to determine the appropriate WIP level.

We also talked about using the calendar as kanban. By designating dates and times for specific tasks and projects, you've essentially created a production schedule for your work, with the calendar (and the calendar alerts) acting as a kanban that pulls work forward.

I decided to try to create my own kanban system following these steps:

1) Establish Your Value Stream – The flow of work I chose was Backlog, This Week, Today, and Done.

2) Establish Your Backlog – I put every task onto a post-it-note, if the task had a due date I put that on the note as well.

3) Establish Your WIP Limit – I limited my Today column to 3 (good place to start) and therefore limited my This Week column to 15

4) Begin to Pull – I moved tasks into the next two columns and got to work.

Below you can see the result on my new kanban:

I have been using my kanban system for a little while and I want to share some things I have learned thus far:

1) For really small tasks I still keep a todo list with paper and pen.
2) This Week column allows me to plan out my week.
3) A WIP of 3 has been working for me for tasks around 1-2 hours in length.
4) The size of the task is not too important. Smaller tasks make you pull faster. For larger tasks I try to break them up into workable chunks.
5) The current board is not portable which I need.
6) Adding color to this system would help distinguish different types of tasks.

While looking at various ways to improve my kanban system I came across this presentation on kanban designs the inspire flow.

InfoPak3 Personal Kanban Design Patterns from Jim Benson

In the next version of my kanban I will attempt to address some of the previous short comings. Just as in Kaizen in your organization, having tried a quick and easy manual version of this kanban I found what works and what doesn't.  Now making those improvements will be even easier.

Lean Quote: The Practice of Leadership

On Fridays I will post a Lean related Quote. Throughout our lifetimes many people touch our lives and leave us with words of wisdom. These can both be a source of new learning and also a point to pause and reflect upon lessons we have learned. Within Lean active learning is an important aspect on this journey because without learning we can not improve.

Feel free to share some of your favorites here as well.

"In theory there is no difference between theory and practice. But, in practice, there is." — Jan L.A. van de Snepscheut

This is true for leadership. If you want to lead you have to practice leading as this quote points out.  What does it mean to practice leadership?  To define leadership let's use the acronym PRACTICE:

Planning – Figure out the steps you have to take.  If a goal is to be achieved the conditions and resources must be put in place.

Right tool/technique – Interestingly enough, effective leadership is like a toolbox. Always use the right tool for the right job. This means knowing both your tools and the problem that you are trying to fix.

Awareness – Having a common knowledge or understanding.  Knowledge gained from observation, data, and personal involvement.  This includes self-awareness which means you need to know yourself.

Communication – Without it you travel alone. To become an effective communicator, you must know how to clarify your messages, be a good listener, be truthful in your words, and get feedback from those who listen.

Teamwork – People working together cooperatively can accomplish more.  Leaders should not think of themselves as simply managers, supervisors, etc.; but rather as "team leaders.

 Innovation – Innovation is two-fold: Bring new thinking and different actions to how you lead as well as creating a climate where others apply innovative thinking to solve problems and develop new products and services.

Culture – Culture tells people how to relate and how to get rewards by set of shared attitudes, values, goals, and practices.  Culture is the mechanism whereby not only management, but employees shape each others' behavior.

Environment – Leaders create conditions for success.  A learning environment with respect for each other which allows for empowered engagement and team work.

The practice of leadership is setting the right example, providing vision and guidance, and doing so is necessary for people within the organization to succeed. The really hard part, the art of leadership, is known as what to do, and when, why, and how to do it.

"It's only in the practice of leadership that we influence our world" - unknown

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Why is Lean Office more difficult than Lean Production?

I am a proud participant of the Western Massachusetts Lean Network. This is a network of Lean thinkers at various stages of their journey whose goal is to share best practices within the network as a way for all of us to continue learning. The Greater Boston Manufacturing Partnership (GBMP) is the host of our network. We recently started a forum for sharing online where we can post a question of the week.

I suggested the following question a couple weeks ago:

Does it seem more difficult to do administrative kaizen then production/operations kaizen? If so, why?

Bruce Hamilton, President of GBMP and Vice Chair of Shingo Prize (aka Mr. Toast), gave an insightful response.

In responding to this question, the following comment from Shigeo Shingo comes to mind: "The real problem is thinking there is no problem." Having spent half of my career in administrative functions (marketing, IT, materials management), I'm well aware that there are loads of problems in the office environment. Information wells, disconnects, and mazes are normal as are correction loops. Office layouts create huge excess motion and encourage batching of everything from sales leads to factory and purchase orders to inspections to invoices – and finally collections. Every piece of information is batched with all the problems that attend that practice. (Of course there are occasional exceptions to this stereotype, so before continuing, I apologize to them.)

The barrier to engaging administrative departments is initially higher than in production for are several reasons:
• Top management is predisposed to round up the usual suspects when problems occur, and those suspects are in production. Management rationalizes that problems occur there because production employees are less well formally educated or because they are paid less and are therefore less likely to care about their work – or maybe they're tired from working a second job and therefore more prone to mistakes. None of this is true, of course, but production often faces this bias and then takes it on the chin when problems occur.
• Office employees take their lead from management and tend to have the same misconceptions about production. At the same time they have an unchallenged complacency for their own situations. While production has a long history of absorbing blame, office employees have remained mostly above the fray when problems occurred.
• Knowledge work" as it's called is not so visible and is mostly unscrutinized. Although waste in knowledge work is huge, office employees fly below the L,M&O radar.
• Office employees (including department managers) have more position power than factory employees and are therefore better equipped to fight change. Many a change agent has been derailed by choosing to battle a savvy office manager.
• Managers of administrative functions are often paid commensurate with the number of reports, so a system that may recommend few reports will not be motivating.

The challenge to overcoming these initial barriers is to:

1. First identify early victories that make the job "easier, better, faster and cheaper" (the theme of our October 19-20 Northeast Shingo Conference). Don't pick a project that involves work or them with benefit only to production (e.g. "Scheduling smaller batches" or "More timely and accurate forecasts.") Pick projects lessens their loads (e.g., "easier pricing system for order entry" or "better customer information for collections" or "printers in the right locations.")
2. Choose "small" projects that can be completed quickly and make sure resources (often IT) are available to complete the efforts.
3. Third, publicize victories to the stakeholders keeping in mind all of the objections and predispositions (and surrounding politics) implied in the points above. Share the success and give credit to managers and employees. Provide explicit descriptions of before and after conditions with hard numbers.

The bottom line is that administrative departments will buy-in once managers and employees understand the benefits and are persuaded that these far outweigh any potential threats. Your objective is to respect and answer their objections while they are learning.

My experience with Lean in the office mirrors that to which Bruce summarized.  Lean is a building, thinking process which requires both learning and thinking by building on experiments.  Bruce provides some logically first steps for any kind of improvement activity.

What are your thoughts on Lean in the office compared to Lean in a production setting?